Half the money I spend on advertising is wasted. The trouble is, I don’t know which half.

The British attribute this to Lord Leverhulme, the founder of Lever Brothers, and the Americans to John Wanamaker, who founded the eponymous department store chain

Anyone who believes that half the money he spends on advertising is wasted is an optimist. Claude C. Hopkins, who invented many successful direct-selling advertising techniques in America in the early 20th century believed the figure was 90 per cent, “because of [advertisers’] selfish purposes brazenly displayed”.1 If you drive your car across a bridge, you expect the bridge to stand up; if you buy a Hoover, you expect it to work. There are few areas of human activity – art, philosophy, and economics are the exceptions – in which there is no generally accepted measurement of functional performance. Advertising, uniquely in business, has none. As a result most of the money spent on advertising is probably wasted, and there is little accountability. Why? Because people in advertising like it that way.

Does advertising influence people? Of course it does. The evidence, though anecdotal, is incontrovertible.

In 1991, a surprise UK bestseller during the Christmas book-buying season was a heavily advertised volume on the art of fly-fishing, by J. R. Hartley. The advertising had appeared well before the work was written. The book was a copywriter’s invention, the object of a sentimental search of secondhand book shops by its elderly author, a fictional figure appearing in a frequently aired Yellow Pages commercial. The advertisement was so popular it created a novelty demand for the imaginary book.

In 1994, the British soft drinks company Britvic published an advertisement warning consumers that rogue manufacturers were passing off inferior beverages under the label of its new product, Still Tango. The public was urged to report any sightings of imitation products being sold by unscrupulous traders. Those civic-minded consumers who bothered to call the freephone number were jeered with the theme of the drink’s advertising campaign, “You’ve been Tango’d”. This stunt attracted 300,000 telephone calls. In the same year Coca-Cola’s new soft drink, OK, was launched in the US with a spoof chain-letter concept. The commercials described the extraordinary things that happened to people who drank the product, or who “broke the chain”. Consumers were invited to phone toll-free to recount their own unusual experiences. Three million people rang in.

Amusing larks like these cost people nothing. Can advertising get people to actually reach into their pockets? Winston Fletcher, an advertising agency chairman, believes advertising aimed at selling products is wasteful almost by definition. He once calculated that 9,500 brands each expended at least £50,000 per year on advertising in the UK, and pointed out that even an energetic consumer could probably buy no more than 400 of them.2 His logic is dotty, since no advertiser expects everyone to buy every product; advertising is aimed at different individuals. But certainly there is a lot of competition tugging at the consumer’s purse-strings.

When Russia first welcomed the free market, the advertising game was played with few rules on a greenfield site. One advertising campaign directed at a population not previously exposed to the capitalist advertising virus achieved spectacular success: it impoverished millions of people, damaged the credibility of the free market, and rocked a government. In 1993 and 1994 one out of every five commercials shown on television was for the MMM joint stock company. MMM offered a pot of gold to hard-strapped Russian consumers. Its shares were guaranteed to increase in value every week until the end of time. All you had to do was buy them and hold on to them for a while before reselling them, and MMM promised to buy them back. Russia’s biggest TV star fronted the commercials, playing a gullible Everyman called Lyonya Golubkov, whose possessions multiplied as the campaign progressed. His early ambition – to buy his wife a new pair of boots with his MMM profits – were parlayed into a suit for himself, a car, and eventually a new flat. “In Paris?” asked his plump wife. “Why not?” responded the voice-over announcer.

Between five and ten million Russians purchased shares in MMM. Those who bought in February 1994 and held onto them as long as July found they had multiplied 68 times in value. Sergei Mavrodi, the financial wizard behind the company, became the fifth richest man in Russia. His paper empire was based on a Ponzi scam, a simple fraud named after the swindler Charles Ponzi, which uses money from new investors to pay off the old. When a warning from the finance ministry set off a stampede of small investors to besiege the Moscow headquarters of the company, its share price plunged from 115,000 roubles to 1,000. Yet there was no Russian law against Ponzi schemes. Rather than collapsing in disgrace, MMM responded with another blitz of reassuring advertising. The company even issued new shares, which provoked a brisk demand. There are Russian laws against tax evasion, however, and by August Sergei Mavrodi had been clapped into prison, while a crowd of duped Russians held a wake for advertising’s fictional get-rich-quick Lyonya Golubkov, burning a cardboard coffin near Moscow’s Pushkin Square.

The spectacular success of MMM advertising was prosecuted in virgin advertising territory, to minds and hearts not yet hardened to advertising promises. Yet dreams beyond avarice live on in the West, too – where massive advertising for Britain’s National Lottery created a whole new cultural pattern, and the British press was full of reports about inadequate people squandering their benefit grants on lottery cards rather than feeding their children.

There can be no doubt that some advertising can have a behavioural influence on those who are exposed to it. But whether advertising “works” depends on what one expects it do. Sometimes, to those who have not been exposed to the communications strategy, such as the intended audience, the objectives of an advertising campaign are difficult to divine. What is one to make, for example, of a 1999 poster consisting entirely of the image of a rosy-fingered dawn and the headline “Imagine what we can do tomorrow” appearing over the logo of an organisation called “The Millennium Experience”? In this exhortation, who are “we”? The British nation? The people who were then constructing the Millennium Dome and for which no use “tomorrow” had yet been imagined? What was one supposed to believe, feel, or do, as the result of exposure to this advertisement?

Advertising campaigns can have a great many different declared objectives. Here are a few which individuals responsible for spending money on national advertising have stated in their briefings to advertising agencies:

• We’ve always done it

• To attract attention

• To be witty and stylish

• To amuse

• To make people like us

• To knock the opposition

• To get back at the opposition for knocking us

• To provide information

• To project our values

• To motivate our staff

• To persuade retailers to stock our products

• To keep our name before the public

• To generate free publicity

• To sell

Whatever the aim of advertising might be, it is usually impossible or impractical to demonstrate whether it has been achieved. But there is almost always an unspoken agenda as well. For advertising performs on a public stage, and the people who create, authorise, and pay for it have a great personal stake in its success. What is vitally important, for their sense of status and prospects of career advancement, is that their advertising be noticed by their peers. Above all, it must be “creative”. This is a quality on which few can agree. Usually it is taken to mean that the advertisement must entertain. Or that it must be different, provocative, outrageous even. In this view a successful advertisement is one which crosses the boundary of what, by some unspecified consensus, was previously unacceptable or distasteful. Thus, to promote book readership, a 1999 press campaign showed the lower half of a youth squatting on a toilet, his underpants around his ankles and a toilet roll in the foreground.

For a canny business manager or shareholder, subjective goals like these are intolerable. They are the paymasters of the advertising industry, and they cannot begin to establish the value of their investment until they agree on its business objective. Usually they would express this as having something to do with shifting goods, or at least opinions. However, many of the best-known and most successful people who create advertising evaluate advertisements in terms of presentational criteria which have little apparent connection with its selling power. Steve Henry, Creative Partner at the UK agency Howell Henry Chaldecott Lury, believes: “In advertising we have a duty to entertain”. John Hegarty, who founded the highly regarded UK advertising agency Bartle Bogle Hegarty, is also not untypical of advertising practitioners when he says: “Ninety per cent of advertising is crap, it can be dishonest, it can trivialise, it can appeal to the lowest common denominator”. While dismissing some commercials, and whole product sectors such as soap powder, for being boring, he praised a contemporary ad for Heineken beer, a spoof on Pygmalion, on the interesting but hardly relevant grounds that “You could look at that in 100 years and understand the whole class structure of this country in less than 60 seconds”.3

Nevertheless, the advertising industry is quick to attribute sales success to advertising, either by broad brush-stroke or specific attribution. Cause and effect are commonly linked in assertions such as these:

• Over a similar period British Airways’ “World’s Favourite Airline” campaign boosted its image and sales.

• Boddington’s Bitter launched its stylish, ironic “Cream of Manchester” campaign in 1991. Within three years sales had trebled.

• Weeks after Wonderbra’s sexy 1995 campaign went up on posters, sales went through the roof.

• In 1995, after British sales of Martini vermouth had fallen steadily for fifteen years, they grew by 10 per cent in the month following a new advertising push.

Sometimes the effect seems to be less favourable. During the early 1990s GQ magazine claimed that its circulation increased whenever its rival Esquire ran a heavy television promotion.

Very occasionally, advertising is blamed for marketing reverses. A high-profile 1998 campaign for Sainsbury’s, featuring the very popular comedian John Cleese in his dramatic persona as a sneering, obsessive bully, was widely attacked by financial analysts for causing a sales slump, without any evidence apart from temporal coincidence.

These effects may or may not have resulted from the advertising. Correlation is different from causation. Many factors in the marketing mix influence sales, and the time-lags between exposure and action are uncertain. But the people who publicise such conclusions are, of course, intensely self-serving. An advertising agency which handles a major ice cream account will be quick to make claims for the efficacy of its advertising during hot summers and to nominate other marketing factors during cold summers. However apocryphal, unsubstantiated or naive, such claims are enthusiastically pressed. Those seeking to find a relationship between advertising and sales – the advertising agency, the client marketing team, the chairman who approved the advertising – all have a keen personal interest in establishing the link.

Unquestionably, advertising can contribute to sales. Some of the most convincing evidence of its influence comes from the toughest arena: “selling off-the-page”. In this technique, a single advertisement is literally expected to make the sale – all by itself. Thousands of different kinds of product, from herbal remedies to choice fillet steaks, are sold in this way, through coupon or telephone response or by e-mail. The people who place these advertisements know exactly which appeals work, if not always why, because the money comes in with the order. It is the purest and most convincing demonstration of the power of advertising, and the school which Claude C. Hopkins helped to found. Advertisers who depend on a less committed response, not cash with order but an enquiry, are also able to monitor closely the effect of individual advertisements by analysing returns. With the development of improved means of targeting the consumer more precisely, the technique has spread to other media – direct mail and telephone selling. Direct-response marketing, as it is now known, has become the largest growth area in advertising. Yet the sector does not attract the flower of advertising talent, who find its straightforward selling techniques primitive and uncreative.

Apart from the direct-response sector, it is unrealistic to expect advertising to close the sale all by itself, (and even there it may be building on other influences, e.g. a concurrent television campaign). Too many other factors intervene. But for most advertising, most of the time, it is reasonable to expect it to have an influence on the sale: to persuade people to take an interest in, consider, or possibly even predispose to buy the thing that is being advertised, to create a “sale in the mind”, which, other things being equal, will contribute to a sale in the marketplace.

Advertising research has two roles: to evaluate before the appearance of a campaign the influence it is likely to have and, after it has appeared, the effect it has actually achieved. And yet, because of the uncertainty of predictive measurements and the difficulty of isolating other factors, it rarely, if ever, succeeds.

The model for good research was summarised by one of the greatest and most iconoclastic of modern scientists, Richard Feynman:

It’s a principle of scientific thought that corresponds to a kind of utter honesty. For example, if you’re doing an experiment, you should report everything that you think might make it invalid – not only what you think is right about it. If you make a theory, for example, and advertise it, or put it out, then you must also put down all the facts that disagree with it, as well as those that agree with it.4

Thus, when searching for a relationship or correlation all the available cases must be included in the analysis and there must be enough of them to make the results statistically valid. Only occasionally is convincing evidence produced about the effect of advertising which attempts to observe the elementary disciplines which would routinely be rigorously applied in any attempt to relate cause and effect in any branch of science, even the social sciences. Moreover, the industry in general does not like to expose the results of its efforts. Although there is a lot of research into particular campaigns, both before and after implementation, the findings, unlike scientific studies, are rarely published or shared in any way. And it is salutary to remember that for every campaign which may claim to have increased a brand’s share of market, by definition one or more competitive advertisers must have failed. No one comes forward to establish this kind of link.

With no other generally acceptable evidence of the worth of their endeavours, advertising agencies tend to define success and compete against each other for business in terms of how many awards they have won. They do this in all seriousness. In this advertising is like arts and entertainment: the people who produce it like to give themselves awards, and are enormously impressed when they receive the praise of their peers. Thousands of advertising award competitions are held every year throughout the world, and so, as in the Red Queen’s croquet match in Through the Looking-Glass, generally there is some prize for almost everybody. The jurors are usually rival advertising professionals, and while some of them, at another time and place, might acknowledge that advertising is supposed to have something to do with selling products, almost all such awards are based on subjective criteria which (the comments of the judges make clear) are usually impressions of originality, aesthetics, or wit. At the 1997 Design and Art Direction Awards (DADA), the UK advertising industry’s equivalent of Hollywood’s Oscar presentations, the jury reckoned only one television submission merited a gold award. It was not a commercial, in fact, but a sponsorship credit for a season of ITV film premieres, which superimposed the faces of deceased film stars, such as Terry Thomas and Bruce Lee, on a pair of lips noisily munching Doritos potato crisps. As one assessor explained. “It won because it was original and mould-breaking. . . [and] because it made all the judges in the room laugh”.

In the UK there is only a single exception to this method of judging excellence by personal opinion. Since 1980 the Institute of Practitioners in Advertising (IPA), of which most advertising agencies are members, has conducted a rigorous biennial competition which is based on empirical evidence linking advertising either to sales results or attitudinal changes which might reasonably be expected to affect behaviour. It publishes case histories based on convincing statistical evidence – for example, controlled regional tests which show advertising in some areas and not in others. But these are a handful of the vast number of advertising campaigns which besiege the consumer.

In general, advertising people judge advertising the way the punters do: they know what they like. In 1987, the advertising trade magazine Campaign surveyed advertising and marketing people, asking them to nominate the best and worst campaigns of the past decade. This panel awarded honours to two entertaining spoofs: a Holsten Pils campaign which used innovative video mixing techniques to enable comedian Griff Rhys-Jones to interact with old movies, and a tongue-in-cheek pastiche of a popular Levi Jeans ad by Carling Black Label. They also cited a series of amusing Cinzano commercials featuring the comedian Leonard Rossiter and actress Joan Collins. Amongst the campaigns the professionals deplored were pitches by cosier celebrities whom they may have had more difficulty in identifying with: Leslie Crowther for Stork SB margarine and Jimmy Young for Ariel Automatic detergent. The opinions of the professionals generally reflected those of their intended audiences: Campaign magazine’sweekly surveys of the commercials viewers liked produced similar results. However, there was a singular exception. The admen had nominated as one of the worst campaigns of the past ten years a new and unusual effort for Nescafé Gold Blend, which over several episodes developed a coy romance between two caffeine-addicted yuppie neighbours. Amongst ordinary viewers, however, these commercials were very popular. Nestlé attributed great success to this campaign and continued to run it for many years thereafter.

The simple 1970s television commercials in which the chief executive of Bernard Matthews plc praised his “bootiful” turkeys directly to camera are regularly cited by British advertising professionals as among the worst ever. In 2000, Bernard Matthews was provoked to respond to yet another criticism, when his ancient advertising was included in Campaign magazine’s “Hall of Shame” of the previous century:

My first advertisement for the turkey breast roast was one of the most successful (perhaps the most successful) new product ads to be made in the UK since the war. Sales went up by 17 times in 14 days. The commercial was so successful that we could not keep up with the demand for six months after it was shown. The ad also provided the basis for our branding on other products with notable success – particularly with cooked poultry meat, where we sell three million packets a week of our brand and control more than 50 per cent of the market.

The IPA Advertising Effectiveness Awards competition has now attracted a database of about 600 case studies of successful campaigns, the largest collection of empirical evidence that advertising works. Yet it has been condemned by Bernard Barnett, an ad industry consultant and former editor of the Campaign tradesheet:

I am fed up with the increasingly common treatment of “creativity” and “effectiveness” as antonyms. This is why the IPA Effectiveness Awards are dangerous – they increase the polarisation of both words . . . In my experience creative juries do not judge the entries on their aesthetic qualities. They judge them on how they are likely to appeal to the customer. It is true that, in the main, they award prizes to advertisements that are arresting, visible, original and persuasive, but these are the very characteristics that make them successful in the marketplace . . . I do not know of any way of quantifying the effect of a particular ad (apart from the direct response category) even though people have been trying for years to find this holy grail. Like it or not, we are stuck with judgement. Personally, I prefer it that way.5

Almost £1 billion is spent each year in the UK on market research. Of that, about £10 million is devoted to testing advertisements in some way. If Mr Barnett’s view is correct, what on earth have the researchers been measuring all these years?